Topic: SEC sues Binance and CZ (Read 358 times)

@Rikafip. What if the SEC is getting some advice from Sam Bankman-Fried on how to manuever a good crackdown against Binance? They can also do a big short on BNB tokens similar to what CZ was speculated to have done on FTT, that he shorted the FTT futures market and did his big dump on the FTT spot market hehehe.

The skeptical me would think that Sam made a deal like this if he is freed or if he is given a very minor slap on the wrist.

Nearly all litigations against corporations are civil cases unless there's reckless criminal conduct. Recklessness in the sense that some level of injury or damages occurred with the knowing creation of unjustified risk and consciously disregarding such risks. Reckless criminal conduct generally does not apply in these sort of cases. Civil classification means the penalty is a fine. Criminal matters mean prison is the penalty.

The SEC isn't going to start throwing people in jail, of course. Their goal might not even be significant fines. If they can drag the legal process out long enough absent of a legal victory, it might hinder Binance from operating in the U.S. The attorneys Binance are hiring for this will range from hundreds, to thousands of dollars per hour. It isn't a cheap fight.

If it turns out Binance knowingly defrauded the U.S. government or its citizens, then this becomes a criminal matter.

Unconfirmed news update.

According to some people in social media, the Judge who is charge of the SEC's case against Binance has denied the request to freeze Binance.us assets. I have not researched if there was a legal reason why, however, the judge might be more concerned about what it might do to the market. If this update is true, it also shows that the SEC does not care about protecting consumers when it requested for Binance.us' assets to be frozen. The market might dump again in fear if something like this goes to the news.

In any case, I am sick and I will have my rest hehe.

It's easy to get out from the current market even though it will make a huge impact to the business' future revenue but the question is, will they be still liable and still be charged of those millions of fines, tax, charges if they get out on US market?

I'm a little late getting this information because lately I haven't been active on Twitter.
I was also surprised when I opened Twitter to see their tweets.

In the first paragraph the contents of the tweet from @BinanceUS seemed a little tense because they said the SEC was using aggressive tactics. They (binance) also said that they felt intimidated by what happened.



This is interesting when I read. The impression is like a fight.

In the second paragraph and so on, binance reassures all customers and conveys a USD deposit hold message.
Interesting to wait for the next result.

@mikeywith also mentioned in another post that it is very strange that the SEC has not sued FTX hehehe. The skeptical me is starting to speculate that uncle Gary is bagholding FTT hehehehee.

In any case, in fairness to uncle Gary, he is not treating Binance differently from Coinbase. However, Coinbase is in a disadvantage because it is a public company. The SEC can request for a preview on their balance sheets and know how much assets they have left in their treasury to fight a long legal proceeding.

If CZ have legal documents or any other proof that they are not doing any illegal activities while operating in US then they should give a good fight with these guys. It will be good to let those official knows that they cannot easily move out a business without getting an appeal in court. For sure CZ can spend a lot of money to defend their selves there.


If they can defend their business maybe this could give huge confident to other smaller exchange to be prepared and they cannot be easily turn down by this greedy guys who always look after their personal interest towards certain businesses.

So it looks like Binance U.S is preparing to suspend US dollar deposits and withdrawals. If you have any funds there, make sure to withdraw ASAP:

https://www.theguardian.com/business/2023/jun/09/binanceus-prepares-to-suspend-us-dollar-deposits-and-withdrawals-from-exchange

From Binance's U.S twitter account:

It is evident that the SEC Chairman Gary Gensler is targeting the big leagues with the claim that cryptocurrencies are securities and they sued coins earlier when they targeted XRP and now they are targeting exchanges. If they back down and move out SEC will start targeting other smaller exchanges and crypto related businesses, Let the big teams fight for the rights rather than surrendering.

Hah yeah, I saw that news yesterday and it really made me chuckle. Hopefully it will show to general public what kind of clown Gary Gensler actually is.


Maybe that, and/or being pissed of that he wasn't given role of a Binance advisor. Either way, there is probably a personal reason for being so angry at crypto.

It's not a battle between the SEC and CZ/Binance, but rather between the SEC and the entire cryptocurrency industry.

It's amazing how much things have changed over time. The United States, once known as the "Land of the free," seems to have taken on a different role in recent years.

What's concerning is the level of corruption that exists in the US, than any third-world countries. What's even more ironic is that the SEC didn't sue FTX. Now the SEC are targeting legitimate businesses that have been trying to work with regulators in good faith for for years after years.

I've never been a huge fan of Binance, even though I was a user for some time. Also not a fan of CZ. And I'm also in favor of heavily regulating centralized exchanges. But I would never agree with the seemingly selective judgements of SEC and Chairman Gensler. If Binance's CZ is right, SEC has never filed a lawsuit against FTX. That's too obvious a bias. FTX has actually hurt users in more ways than one when it went bankrupt. Binance at least is still serving its users until now.

I also don't agree with Bitcoin supporters cheering for the SEC for going against Binance. However, although Gensler is a hypocrite and SEC is corrupt, I wish that the case be solely decided on the merits and not on some external factors or prejudices.

@Darker45. As a user of crypto and an enjoyer of the innovation it brings, I wish for Binance to win the case because a win for them will certainly be a victory for the cryptospace and its community of users.

Also, who would be happy to witness this joker Gensler and the old grandmas Elizabeth Warren, Janet Yellen get the win? We should be scratching our heads if we see someone in the forum cheering for them.

That may be true, but as I've said, this is a different story because this involves the US market. This isn't Thailand's or the Philippines'. I don't have the figures, but I think the US market is a huge contributor to Binance's revenue. So from a business perspective, to fight for it is still the best way to go. After all, Binance definitely has expensive law firms on retainer. So they are just being put to work now.

That this suit will drag on for years is to Binance's advantage in a way. They continue to operate and earn big day after day while they are dealing with their legal obstacles.

Also, they don't have much choice anymore now that the lawsuit has already been filed. They will have to face it.

If anyone does not see this lawsuit as a surprise, do you know what would come as a surprise? The allegation in this article hehehe. This shows Gary Gensler's hypocrisy. There was also a video of him where he was shilling Algorand, telling his listeners in MIT that Uber could be built in this blockchain hehehehe. I am starting to speculate that he might have lost a big investment in an altcoin somewhere which might have also triggered his personal war against the cryptospace.



Binance lawyers allege SEC Chair Gensler offered to serve as advisor to crypto company in 2019

SEC Chair Gary Gensler, who is in the midst of a hefty crackdown on crypto companies, offered to serve as an advisor to Binance’s parent company in 2019, according to the lawyers for Binance and founder Changpeng Zhao.

Documents filed by the SEC on Wednesday indicate that attorneys from Gibson Dunn and Latham & Watkins, two of Binance’s law firms, allege that Gensler offered to serve as an advisor to the crypto exchange in several March 2019 conversations with Binance executives and Zhao. He eventually met Zhao in Japan for lunch later that month, the filing claims.

Source https://www.cnbc.com/2023/06/07/binance-lawyers-say-sec-chair-gensler-offered-to-be-advisor-in-2019.html

Exactly there are still other choices to pick and binance is not the only legitimate operating around. So I guess the old binance.us users will find another alternative so that they can continue to trade or do any transaction on exchangers.

But I also hope that Binance will not get affected on this what so called government harassment and continue to operate outside US.

Nope. At least not in a significant measure.

If fall of first Mt.Gox and then FTX didn't make people move away from centralized exchanges, I don't think these measures will either. All it will eventually lead to is more restrictions & regulations and that's about it.

SEC is really releasing everything on Binance and now they want to freeze Binance US and this news cause a large outflow of funds out of Binance
https://cointelegraph.com/news/binance-us-user-funds-safe-amid-sec-injunction-freeze-assets

Binance users have withdrawn over $3B across multiple chains since the announcement
https://twitter.com/nansen_ai/status/1666145237474095104

After the Binance and coinbase is sued by SEC,maybe more people will choose the DEX,do you think so?

News update.

Who is this we Gensler is talking about? Shaking my head because it appears he is trying to speak for everyone.

This Gensler does not answer the calls for the cryptospace's need and questions for regulatory clarity. He would prefer to use fear tactics and lawsuits to enforce the old rules that have become questionable in regulating the cryptospace.

This statement also appears that he is announcing that he wants an effective ban and his actions have been trying to make it a reality.



U.S. Securities and Exchange Commission Chair Gary Gensler took to live television on Tuesday to say there is no need for more digital currencies.

“We don’t need more digital currency. We already have digital currency. It’s called the U.S. dollar. It’s called euro. It’s called the yen. They’re all digital now,” said Gensler on CNBC's Squawk Box.

Source https://www.theblock.co/post/233295/gary-gensler-crypto-coinbase-binance




I reckon it might be more advantageous for them as a business to leave the jurisdiction where they are not wanted and return when there is regulatory clarity. They will be wasting much funds on lawsuits that might not get a resolution until years later.

This shouldn't come as a surprise to many. This was expected. It wasn't a matter of if but when. Now, finally, the lawsuit was filed.

Depending on how the case develops, I don't think Binance would just "leave the US market completely." It's too huge to just abandon. As a matter of fact, I completely understand why Binance is acting differently on this one. While Binance quickly packed up, didn't even put up much of a fight, and left a number of countries due to regulatory and other legal challenges, it has now promised to defend itself "vigorously."

There will also surely be a lot of backchanneling and backstage negotiations on this one.

Why would you even hope that you will spend dear Bitcoin to buy a pair of socks when there are less valuable currencies that you can use? "bad money drives out good.", we will have to run out of every medium of value before we can use BTC for every payment.

I think Satoshi calling it "A Peer-to-Peer Electronic Cash System" was either misunderstood by the public, since those words don't imply that BTC would be used for daily payments and only meant that you could send/receive it on P2P bases without having a centralized party approval, something like "Cash", hence the "Cash" in the wordings.

The other possibility is the fact that Satoshi underestimated his invention, he didn't see all of this coming, and he didn't think BTC would eventually be too good to be spent.

Regardless of which scenario is more likely, I think the backbone of BTC is the ability to transact it freely without government approval, this has been holding true since its inspection, how we treat it isn't something major, in fact, it really almost doesn't matter, whether you use it to buy coffee to save it for your grandchildren in a cold wallet, it doesn't change any of it's decentralized and limited supply characteristics.

Now back to the topic and to give more clarity on why I think this is a systematic war against crypto and not just a war on an exchange, the SEC is a government agency, they act based on what the government wants, the concept of consumer protection is just for media consumption, the government knows that attacking central exchanges is key in its war against crypto, whether the goal is to destroy crypto all together or just to control it, they see things we don't, the fact that they started with the exchanges is somewhat good evidence that they think exchanges are a point of strength for bitcoin and crypto as a whole.

If you take down centralized exchanges, you take away too much from crypto, without having to piss your people off because again, you are doing all this to protect them from the devils like Binance, while in the background your real intention is to cripple crypto, if you manage to bring BTC's price down to 3 digits again, it becomes easier to control.

Within our own inner circuit of the crypto community, we can curse Binance and all the centralized exchanges every day of the week, but when a government agency attacks a crypto-based entity, we should stand against the government, it is safe to assume that every monetary decision taken by any government around the globe will have a negative impact on the average citizen, if Binance falls on its own or due to compensation that would be perfectly fine, failing by government's action is going to have a huge negative impact on the crypto space.

🚨 WITHDRAW YOUR #BITCOIN FROM EXCHANGES 🚨

https://twitter.com/BitcoinMagazine/status/1666206476744941621?t=Vp3mD9WJqyk14POUVC202g&s=19

I know too well the difference between reality and how I would want things to be, I would love to see a lot of things happening differently and I'm also sure most of my dreams and hopes will never materialize, I'm beginning to lose even hope that Bitcoin will be ever used in purchasing stuff more than gold is nowadays. But this can't stop me from hating this reality! 


Mainly because exchanges are definitely on CFTC's turf since none are registered with the SEC, so the SEC deals with sales of coins or cases that involved defrauding like in the normal stock market that's why it has filed charges against the operators and not against FTX, while the CFTC has filed charges against both the exchanges and the owners.
FTX Derivatives was licensed and registered by the CFTC, not the SEC, they were the overseer and it's pretty normal they should deal with the case.

Alas, you probably forgot to mention a dozen more bad things about Binance, it's why I said you shouldn't be expecting much from a centralized exchange, Binance is as best as it gets as far as a centralized exchange is concerned, it's the reason why it has nearly half the trading volume of the whole crypto space.


What Bitcoin was meant to be, and how it is nowadays are two different things, we can live in the fancy of the white paper, or face reality. The reality is, the percentage of people who treat BTC as a P2P E-cash system rounded to the nearest whole number is 0%, it's now a store of value as far as the majority of people who use it are concerned.

Binance is a centralized exchange, it's a massive gate for fiat going into crypto, BTC wouldn't be worth what it is today if not for the liquidity provided by those centralized exchanges, I'd imagine it would be a problematic task bringing the market cap of crypto to 1 trillion with dozen guys meeting at Starbucks to exchange cash for crypto.

See, I don't disagree with you on how "terrible" things have become and how the security, and value of crypto have been tied to centralized exchanges that are known for lies, corruption, and nearly everything the legacy banks are known for, but you can't have everything at once. if you want to get rid of all the "bad guys" in the crypto space, you will have to start from when BTC was worth no more than a couple of hundred bucks, hard to buy, difficult to sell, no known market value and only a couple nerds use it to buy Pizza and some CPU cooler.

For Binance as it stands right now, every hack that resulted in funds lost was paid back to the clients, they are pretty flexible with other nations and don't suck up to the hegemony of the united states, they are the last exchange to ban a U.S banned country, they operate one massive mining pool that helps to a good degree with mining decentralization, they have very good customer support. if we can't say they are the most sane, we can at least say they are the least terrible (which I believe is a better description)



ha? According to the defination of the SEC role:


If they can SUE Binance and Coinbase, they sure could sue FTX, didn't U.S citizens lose billions of dollars in FTX? wasn't the SEC responsible for "protecting" investors?

Not sure why you say that is the rule of CFTC, it's true that if something is a commodity then it's under the CFTC, but currency trading is under SEC, they most certainly could sue FTX for a dozen things.

Here is a TL;DR

Refusing to implement LN, charging the most significant fees for BTC withdrawals and charging more for segwit than legacy, promoting shitcoins as BTC alternatives, the constant lies of CZ about being licensed in Singapore, Japan, Malta, then god knows where, his idea about reverting the chain when Binance got hacked, how he always tried to weasel his way out and have the moral high ground despite being knowledgeable about all the fuckups with his partners/friends, see the FXT drama, the fake "proof of funds", the whole #SAFU that has funds actually and is insured for less than 2% of their holdings, lies after lies after lies.


Meh, "A Peer-to-Peer Electronic Cash System", sorry but having a centralized entity dealing in control of user funds and manipulating markets is as far as possible from what Bitcoin was meant to be and as close as possible to a bank. After all, what is the difference here between trading penny stocks and shitcoins on Binance?


The SEC can't sue FTX, it has raised charges against Sam and Nishad Singh, for FTX collapse the SEC has no business there, that's the role of CFTC and this one has already filed charges against both FTX and Alameda.

Why tho? what is exactly wrong with Binance? it doesn't matter how many wrong things anyone would mention, they are the most sane centralized exchange the crypto space has ever had, it would be naive to expect too much from a centralized exchange, but Binance delivers everything that could be delivered and nobody does it better.

We have to understand that at this point an attack on Binance is essentially an attack on the whole ecosystem, Binance has more trading volume than the next dozen exchange on the list combined. if it was a matter of Binance VS Electrum that would be a different fight, but this fight is the corrupt SEC vs the largest crypto exchange, it's funny that the SEC has yet to sue FTX but do everything at their disposal to sue Binance.

If nothing seriously bad happens in a day or two and if the CZ tweets that things are under control, the market will pump instant. It is just a matter of which way the case is going and who is playing strong.

As long as Binance do not disable withdrawals or we have other bad news about this case, I think the crypto market will recover. Also, there is another news where SEC sues Coinbase 24 hours after serving papers to rival exchange Binance, which is now causing another panic in the market. Look like the security and exchange commission is after the crypto exchanges aggressively.

What scares me the most is the misuse of clients’ money because if any problem occurs, random FUD started and money withdrawals start, suddenly we will discover that the platform owns only less than 10% of the depositors’ money as liquidity, and more liquidity as BNB that are printed to cover the money that was withdrawn. This reminds me of what happened with FTX.

Those affected in these incidents will only be the users and the reputation of the cryptocurrency, so everyone who has money on that platform is better to withdraw it from that platform, and stay away from BNB pairs for a bit (unless you trust the platform)



edit

SEC Complaint Aims to Unilaterally Define Crypto Market Structure Binance reply https://www.binance.com/en/blog/ecosystem/sec-complaint-aims-to-unilaterally-define-crypto-market-structure-8707489117122437402


fast reading


They are promises and claims that they have tried to do anything to avoid litigation and we will do everything we can to defend ourselves, emotional talk without evidence, I bet they will leave the US market soon.

Yes. People think that Binance is immediately going to go bust or something, but in reality things like this are a long, slow, and gruellingly painful process. In the end we're likely going to get minor news concerning this topic month-by-month for some more added volatility.

"Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," said SEC Chair Gary Gensler.

"As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied."

https://www.france24.com/en/live-news/20230605-us-regulators-charge-binance-with-violating-securities-laws-1

I think we know that no ones checks Binance's financial records.
I also want to know where does Binance get those APY especially in the stablecoins services.

Agreed. Uncle Gary and the US SEC also have unresolved cases against Coinbase and Ripple. This will certainly take a much longer time than expected. I am quite sure the market will recover and enters a new all time high before the case is resolved hehehe. This is because everything about the SEC's complaints are based on regulatory inclarity. They are playing the game of which exchange or project should they sue at any given time hehe.

In any case, here is the filing of the SEC's case against Binance, Binance.us and CZ. These coins were mentioned as illegal securities. It is not limited to them, however. It implies more tokens can be included.



Since the Binance Platforms launched, Defendants have made available for
trading on them crypto assets that are offered and sold as investment contracts, and thus as
securities. This includes, but is not limited to, BNB, BUSD, and the units of each of the crypto
asset securities further described below—with trading symbols SOL, ADA, MATIC, FIL,
ATOM, SAND, MANA, ALGO, AXS, and COTI (collectively, the “Crypto Asset Securities").

Source https://www.docdroid.net/I02zzqT/sec-v-binance-4-pdf#page=85

Sec and its arm twisting tactics!

And why is Sec suing Changpeng Zhao (CZ) in his personal capacity,  isn't this some kind of intimidation because I thought Binance and its CEO need to distinguished here and to some extent CZ should be protected from such liabilities...
Btw Isn't suing Binance enough to make their case, than going for CZ too??

Hihi, one tweet below is another explanation, the SEC can't start a criminal investigation, it can only prosecute in civil and administrative courts, but all it takes is a notification to the DoJ for that to start a criminal one, and once the DoJ accept this from the SEC it's usually game over and plead guilty if you want to get out, as Hayes&Co did in the Bitmex case.

I don't like CZ and I don't like Binance but I don't think he's that stupid to play with fire.
He has pushed things too far and I think he thought he is invincible with all his scheming but he's in for a rude awakening.

I've asked myself the very same question and only thing that makes sense is that he is either making enough money that is worth it to go though all that hassle, or he plans to make it in the future so its worth it to suck it up and fight.


One of the users commented under that tweet "That doesn't prevent criminal charges at a later date once more is revealed through discovery in the civil suit" so maybe their evidence is just not strong enough as of yet.

Binance and CZ has been a target for quite some time but binance always come up strong. Not this time US SEC sues Binance, founder Zhao alleging securities law violations, they have sued CZ, what will be the consequences of this if this news holds up ?
Is Binane US will only be in trouble or the binance globally will be affected because remember this time the target is CZ himself and not only the exchange Binance US  

Take note while this is definitely not good, it's important to understand that this is a civil case NOT a criminal case; as pointed out in the below tweet. I'm not some law expert but I'd assume it's a significant difference.

https://twitter.com/WuBlockchain/status/1665751740380229632?s=20

I'm not familiar with the legalities here but what I can't seem to understand is why is CZ still running Binance.us with everything that has been happening with BUSD and the CFTC lately.

I also read news about this in this article,

[1] https://u.today/breaking-sec-unleashes-legal-fury-on-binance-and-cz-bnb-plunges

to be honest, this is just an accusation because the SEC has not been able to prove everything they accuse Binance and CZ I'm sure this drama won't last long ^{(bnb prices which corrected a few percent because of this news will definitely go up again)}, the SEC based on their charges is a bit confusing imo ^{(maybe the SEC wants to try to show their power)}

New day, new problems for Binance and CZ in the US. After getting sued by CFTC earlier this year, this time SEC sued them them for breaking US securities rules.

Looks to me like its just the matter of time when Binance leaves US market completely, whether they want it or not.  

https://tokenist.com/sec-sues-binance-and-changpeng-zhao-alleging-securities-laws-violation/